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The
Republican Layoff Conspiracy
February
22, 2002
by Kevin J. Shay
Lost in the excitement last year over Enron and the purported
War on Terrorism was this fact: 2001 was the worst year for
workers since the early Reagan years.
The ranks of the unemployed grew by 2.6 million last year,
the most since 1982, according to the U.S. Department of Labor.
Most of those new former laborers collecting unemployment
were laid off - estimates on the number of layoffs in 2001
ranged from 1.8 million to 2.5 million.
I was one of those 2 million or so layoff victims. I had
worked as a reporter and editor for Dallas-area newspapers
owned by Texas-based Belo Corp. for the previous nine-and-a-half
years. My last position was as a business reporter for The
Dallas Morning News. Remaining unconvinced that my company
was doing as poorly as management said, I have conducted some
research into the finances of Belo and other companies that
made some major layoffs in 2001.
My findings may not surprise you: Half of 30 companies picked
at random that made layoffs of at least 1,000 workers last
year made money. And only one of those 15 that lost funds
in 2001 showed a loss the previous year. I did not include
Belo in that group since it made layoffs of less than 1,000
employees, but Belo about broke even last year while making
$151 million in 2000.
Many of the firms that made large layoffs in 2001 pulled
down good money. For example, New York-based financial firm
Citigroup Inc. announced it would slash 7,800 jobs last November,
then went on to record a whopping $14.1 billion in profit
in 2001. That came on top of making $13.5 billion in 2000
and $9.9 billion in 1999.
Why did Citigroup need to cut almost 8,000 employees when
it made so much and paid its chief executive, Sanford Weill,
an obscene $225 million in 2000? Weill has a history of leaving
a trail of layoffs that help boost his pay. Between 1987 and
1997, when he was CEO of Travelers Insurance, which merged
with Citibank to form Citigroup, Weill cut jobs by one third
and became one of the highest paid chief executives in the
country.
Another company that made off well last year while cutting
people was the New York Times Co., which said it would send
1,260 workers to the unemployment lines last June. The Times
Co. made $444.7 million in 2001, after hauling in $397.5 million
in 2000 and $310.2 million in 1999. Other companies I researched
- including IBM, Verizon, WorldCom, Dell, Hewlett-Packard,
American Express, Bristol-Myers, Sara Lee, Tribune Co., VF
Corp., Wachovia Corp., and Proctor & Gamble - took in similar
nice profits before and after the layoffs.
So what's going on here? You can't blame all these layoffs
on September 11 - about 63 percent of job cuts tracked last
year by the Labor Department came before that date. And you
obviously can't blame declining profits in many cases. Is
there some kind of campaign by executives, who were complaining
about not having enough qualified employees throughout much
of the 1990s, to reduce job security, wages, and benefits
through increased layoffs?
In effect, are corporate bigwigs taking it on themselves
to turn the employees' job market of much of the last decade
back into an employers' market? Or is it just plain old greed,
in which shareholders who care more about increased profits
than the overall welfare of the company and its employees,
not to mention the costs of job cuts to society, are demanding
these layoffs? Where's Oliver Stone when you need him?
As you might guess, this layoff conspiracy leads directly
to the White House. Remember what Bush and Cheney did in December
2000 as soon as they had stolen - er, been appointed to -
the presidency? Cheney, a former corporate bigwig himself,
went on major television programs and talked about how bad
the economy was, blaming it on Clinton, when most real economists
agreed it was not that bad - yet.
Bush, a failed corporate smallwig who could only make money
through a questionable stock transaction with Harken Energy
and as part owner of the Texas Rangers baseball team by convincing
taxpayers to fund most of a new stadium, talked the economy
down in his own way in front of crowds of supporters and in
one-on-one meetings with reporters. Bush's handlers wouldn't
let him go on TV and actually answer a question more complex
than "How's your golf game?"
Their aim was to blame the impending recession on the Clinton
administration, and to pay back their huge campaign contributors,
many of whom were these same corporate executives who complained
before about not having enough qualified employees, by aiding
the return of an employers' market.
For example, Ivan Seidenberg, president of Verizon Communications,
the $67 billion telecommunications giant formed by the union
of Bell Atlantic and GTE, gave $1,000 to Bush's campaign,
the legal limit for an individual. His company contributed
$818,000 to Republican Party committees and $3 million to
the 2000 Republican National Convention. Verizon was one of
the first firms to lay off workers last year, cutting 10,000
jobs. The company ended up making $590 million in 2001, after
hauling in an astronomical $11.8 billion in 2000. That year,
Seidenberg amassed $15.7 million in salary alone.
Other company executives gave even more to the GOP. Cisco
Systems President John Chambers donated $280,000 by himself
to Republican committees in 2000, the same year he made $157
million. Cisco laid off 8,500 people last year after making
$2.7 million in 2000. The firm did lose $1 billion in 2001,
but it made up about 40 percent of that loss in the first
three months of its 2002 fiscal year.
Then there is Cheney's former firm, Dallas-based Halliburton
Co., which is vying to become the next Enron and will more
than likely announce some major layoffs soon. Halliburton's
stock dropped under $16 a share on Feb. 20 after reaching
$49.25 nine months before. The freefall was blamed largely
on multimillion-dollar asbestos court verdicts, and one rumor
before Bush's State of the Union address in January was that
he was going to call for limiting such asbestos claims. Bush
didn't then, but he will sometime, just wait.
Pittsburgh-based Harbison-Walker Refractories Co., a former
subsidiary of Dresser Industries, which Halliburton bought
in 1998, has already filed for bankruptcy. Will Halliburton
be next? And is this part of the reason why Cheney is pushing
so hard for legislation that will benefit his former employer,
such as drilling for oil on protected federal lands like in
Alaska? When Cheney left in 2000 as CEO of Halliburton, a
position he held since 1995, he sold his stock for more than
$40 a share. He personally pocketed more than $33 million
in 2000 from Halliburton. You don't think Cheney remembers
that deal?
Cheney presided over several rounds of job cuts, including
of about 11,000 workers in 1999, a year that Halliburton showed
a $438 million profit. Since those layoffs, Halliburton's
profits have risen, to $501 million in 2000 and $809 million
in 2001.
An interesting sidebit to this story is that Houston-based
Kellogg Brown & Root, another Halliburton offshoot, recently
agreed to pay the U.S. government $2 million to settle allegations
it defrauded the military by submitting false claims for delivery
orders between 1994 and 1998. So here you have Cheney trying
to at least indirectly help his former company, which is possibly
preparing to lay off more workers, through friendly legislation
as one of its subsidiaries reportedly defrauds all of us.
And yes, Cheney still lived in the Dallas area until after
the November 2000 election in apparent violation of the 12th
Amendment to the U.S. Constitution. He didn't sell his Dallas-area
mansion to a major Republican donor until Nov. 30, 2000, according
to deed records. Through a local television station's camera,
I saw Cheney stroll out of his Dallas-area home late at night
after Nov. 7, 2000. Contrary to Republican spin, Cheney never
was a resident of Wyoming in 2000.
Company executives and their apologists will tell you they
"need" to lay off workers - even when the firm is making boatloads
of money - to remain competitive in today's market. Don't
buy that bull. In the increasingly merger-friendly environment,
competition for many large megacorporations is not much of
an issue. The main issue for many shareholders is to acquire
as much capital and return on investment as possible. For
these multimillionaires and billionaires, money is only a
way to keep score, not a basic necessity that can mean the
difference between eating and not eating. And they only feel
good when that score is going up, even if it is at the expense
of a person making $20,000 or $30,000 a year.
Most really liked Bush's tax cut plan last year, which netted
the super wealthy millions of additional dollars. The wealthiest
1 percent of Americans already own about 40 percent of the
wealth, and that is only expected to grow under this current
so-called "Christian" administration (idle thought: would
Christ really support this feed-the-rich-and-soak-the-poor
administration?)
So what do we do about this situation? We stage a nonviolent
revolt. We organize politically. We educate people on companies
that practice alternatives to layoffs like reducing hours
- Phil Hyde of Timesizing.com highlights numerous good examples.
We educate people on studies that show layoffs actually hurt
companies' profits due to lower morale, a loss of momentum,
and other factors, such as one last year by Watson Wyatt Worldwide,
a Washington, D.C.-based consulting firm.
We support unions, even though they are not perfect themselves
but are better than nothing. We demonstrate. We go on strike.
We file employment discrimination claims with government agencies
when we are laid off - I have a claim pending against Belo
myself. In short, we do whatever we can to make the bigwigs
feel our pain and perhaps think twice about laying us off
just to make a few more bucks in the future.
In my daydreams, I see myself taking a page from Michael
Moore, the populist film maker of Roger and Me who dogged
former General Motors Chairman Roger Smith after GM closed
plants and laid off thousands of workers in Moore's native
town of Flint, Mich., in the 1980s, despite GM continuing
to make billions in profits. I see myself bursting into Belo
shareholders' meetings and firing questions about the layoffs
at stunned executives.
My wife, Michelle, even recently had an actual nocturnal
dream about her and me and others doing just that at some
Belo meeting and causing a big stink - things are really getting
weird when your spouse has dreams about your former workplace.
In her wild dream, Bush happened to be there and offered to
help place a story I wrote in a national newspaper or magazine.
I turned down Bush's help on principle, figuratively telling
him to shove it before I walked off. It was only a dream,
but the scenario sounds good to me.
Some say we shouldn't concern ourselves with this layoff
conspiracy because executives like Smith and Weill and Seidenberg
and Chambers - as well as their political conspirators like
Bush and Cheney - will get their just desserts in their afterlives.
Some believe the corporate and political masters will be sent
to Hell - wherever the hell that is - to live in eternal damnation,
if they aren't there already. Others say they will have to
reincarnate to the Earth as low-level workers and see what
it's like to live paycheck to paycheck for themselves.
I don't know about those theories. But I do believe that
one day in the near future, such executives and politicians
will be forced to search the vacuous depths of their souls,
and answer to themselves and to a Higher Authority.
And then, perhaps there will be hell to pay. Maybe through
their redemption, the rest of us will benefit. Maybe not.
All I know is we have to keep fighting, right here, right
now.
Kevin J. Shay is a Texas-based freelance writer and founder
of LayoffWatch, an Internet site that tracks layoffs and the
profits of these companies at http://www.angelfire.com/biz/shaybiz/layoff.html.
He can be contacted through email at mkshay40@yahoo.com.
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